1099-K

  • 1099-K

1099-K

1099-K

Rowan University makes third-party payments to our RowanCard merchant vendors and businesses in the course of the University’s trade or business. Federal and State tax regulations require that Accounts Payable report certain types of payments to the Internal Revenue Service (IRS), state taxing authorities, and merchant vendors for payments made in each calendar year. The payments are reported to our vendors on the IRS 1099-K Form. 

The reporting requirement for these transactions must exceed $600 regardless of the total number of transactions during a calendar year.

All merchant vendor payments processed through Accounts Payable require an entity type and must be a U.S. citizen or entity for tax purposes. 

The reportable entity types include: 

  • Individuals
  • Sole Proprietorships
  • Single-member LLCs
  • Partnerships
  • Corporations 

Government and tax-exempt organizations are excluded from reportable entity types. Form 1099-K will be issued regardless if the vendor is a corporation.  

For a full description please visit the IRS website and review Instructions for Form 1099-K.

1099-K Boxes & Examples

Accounts Payable must report all 1099-K paid transactions issued to the reportable entity types listed above, including but not limited to our RowanCard merchant vendors or other third parties.

1099-K - Payment Card and Third Party Network Transactions: Payment amounts of $600 or more that were made to our RowanCard merchants for performing payment card and third party network transactions. Form 1099-K, Payment Card and Third Party Network Transactions, is a form issued by Rowan University to vendors that process electronic payments such as credit and debit card transactions. The university sends Form 1099-K to entities (RowanCard merchants) that receive such payments throughout the calendar year.

Box 1a - Gross amount of payment card/third-party network transactions: This box will display the total gross amount of income that the RowanCard merchant received from electronic payments such as credit cards, debit cards, and other third party payers for the calendar year.

Box 1b - Card Not Present Transactions: This box will display the gross amount of the total reportable payment card/third-party network transactions for the calendar year where the card was not present at the time of the transaction or the card number was keyed into the terminal. 

Box 3 - Number of payment transactions: This box will display the number of payment transactions (not including refund transactions) processed by Rowan to the merchant vendor in a calendar year. 

Boxes 5a through 5l - January-December: These boxes will display the gross amount of the total reportable payment transactions for each month of the calendar year.

Boxes not utilized by Rowan University at this time:

Box 2 - Merchant Category Code
Boxes 6 through 8 - State Information 

 

*All information is subject to change without notice and at any time

Exceptions

Exceptions for reporting third-party network transactions:
  • The reporting requirement for these transactions has changed from totals exceeding $20,000 to exceeding $600, regardless of the total number of transactions. 
  • Exception for de minimis payments. A third-party settlement organization (TPSO) is required to report any information concerning third-party network transactions of any participating payee only if the gross amount of total reportable payment transactions exceed $600 for the calendar year, regardless of the number of transactions.

1099-K FAQs

What is a W-9 form?

A W-9 form, when signed by the entity or individual, validates the legal name. It has to be the name recognized by the IRS tax identification number (TIN), which is the entity’s tax identification number or the social security number, if an individual.

Who should complete an IRS Form W-9 (Request for Taxpayer Identification Number and Certification)?

The following people or entities complete the IRS Form W-9:

  • People legally living in the United States (including resident aliens)
  • Partnership, Corporation, Company, Association, Estate, or Domestic Trust which has been organized in the United States or under the laws of the United States.
Why was I asked to obtain a Form W-9 (Request for Taxpayer Identification Number and Certification) for a new vendor?

To comply with Federal and State laws and regulations, the University must have a correct and complete W-9 on file before the University is allowed to issue a payment to the vendor. The university is required to report certain payments to the IRS. This form gathers all the pertinent information we need in order to comply with the IRS regulation.

What does “TIN” stand for? What is the difference between an EIN and a Federal Tax Identification Number (often referred to as a “Federal I.D. Number”)?

“TIN” stands for “Tax Identification Number.” There are two types of Tax Identification Numbers:

  •  Social Security Number (“SSN”): The SSN is assigned by the United States Internal Revenue Services (“IRS”) for individual U.S. citizens and resident aliens.
  • Employer Identification Number (“EIN”): The EIN is assigned by the IRS for corporations and some other entities. The EIN also known as the Federal Tax Identification Number (commonly called a “Federal Tax ID”). So, the EIN and the Federal Tax Identification Number is the same number.
Why did I receive Form 1099-K and Form 1099-NEC?

A individual/vendor may receive multiple forms from the university depending on the entity type and the type of services performed. All RowanCard merchant vendors are reportable on Form 1099-K regardless if the vendor is a corporation. However, the university may also issue a Form 1099-NEC if that same vendor performed nonemployee compensation services during the same calendar year. The reportable entity types include:

  • Individuals
  • Sole proprietorships
  • Single-member LLCs
  • Partnerships
  • Corporations

 

For example, a sole proprietorship entity provided RowanCard services and catering services to the university. Since the entity type is a sole proprietorship the vendor will receive both tax forms.

Sole proprietorship (will receive both forms)

  • RowanCard services - 1099-K
  • Catering services -  1099-NEC

 

What are the 1099-K threshold changes since the calendar year 2022?

The American Rescue Plan Act of 2021 (the Act) significantly modified the reporting threshold associated with Form 1099-K, Payment Card and Third Party Network Transactions. The threshold changed from $20,000 in aggregate payments and 200 transactions to solely a threshold of $600 in aggregate payments with no minimum transaction requirement.

The new rule took effect with payment transactions starting January 01, 2022. 

What type of payment transactions does the American Rescue Plan Act of 2021 affect?

This change affects entities (vendors) that settle payment transactions through a third-party payment network. These types of arrangements involve online payment platforms, marketplaces, or internet payment service providers (merchant vendors).

In addition, the Act clarifies that third-party network transactions include only transactions for the provision of ‘goods or services.’

Note: As a result, non-reportable transactions, and reimbursements are not included on Form 1099-K.

What are the due dates for filing the 1099-K electronically and by paper?
The due date is January 31 in the year following the applicable tax year. If January 31 does not fall on a business day, the due date will be moved to the next business day.
Campus Administrator's Dos and Don’ts with Form 1099-K?

 

  • Do verify the vendor provided a completed W-9 and that the tax ID is accurate
  • Do remind individuals or vendors about the reportable threshold of $600 or greater per calendar year
  • Do check vendor history in Banner FAIVNDH to ensure the vendor was paid more than $600 that calendar year
  • Do provide the individual or vendor our dedicated inbox, invoices@rowan.edu, to contact AP if they have 1099 questions
  • Don’t provide tax advice to individuals or vendors for 1099 forms
  • Don’t use Form 1099-NEC to report rent, royalty, other income, employee wages or personal reimbursement
  • Don’t request 1099-K forms on behalf of the individual or vendor
How can I get a copy or request a correction of my Form 1099-K?

Contact Accounts Payable with questions about Form 1099-K. This includes questions related to amount, payment detail, incorrect Tax ID, name listed on the form or if the form was lost or never received.

Sabrina S. Boron
boron@rowan.edu
856-256-4140

Accounts Payable 
invoices@rowan.edu
865-256-4115

Whom do I contact with questions regarding how to report the amounts from Form 1099-K on my tax return?

Please direct these questions to your tax professional or to the IRS. Please visit www.irs.gov for additional information.

IRS Website Links

Other Issued Forms & Resources

Contact Information

All 1099 related questions should be directed to the Accounts Payable Department.

Marianne Pitman
pitman@rowan.edu
856-256-4849

Accounts Payable 
invoices@rowan.edu
865-256-4115